DoT, telcos mull foreign players' entry in ILD sector

With India set to begin negotiations with other countries to push trade in services at the World Trade Organisation (WTO), telecom companies and department of telecommunications (DoT) have begun discussions on issues such as resale of telephone voice services and bandwidth, and opening of the international long-distance (ILD) sector to foreign players.

Government sources said the discussions were aimed at firming up the telecom sector's "proposals for plurilateral requests to other members". This is because, at the Hong Kong ministerial in December, it was decided that countries would submit plurilateral requests for trade and services by February 2006.

The primary issue being debated is the resale of telephone voice services, which is currently not permitted in the country.

If permitted, this will allow international mobile operators to enter the Indian market through the mobile virtual network (MVNO) route, where the new entrant can buy airtime in bulk from a domestic operator and sell it to customers using its brand name. An MVNO operator does not have to own neither the network nor spectrum for launching services in India.

Additionally, the resale of leased circuits was also being considered, operators said. Recently, Telecom Regulatory Authority of India (Trai) had recommended that reselling of bandwidth be permitted from 2007 to bring in more competition in the international bandwidth segment.

Operators and the government are also considering the demand by global ILD carriers to carry voice and data traffic out of India.

At present, international carriers must obtain an ILD licence from the Indian government and pay the stipulated entry fee and share revenues to carry international traffic out of the country.

Trai has proposed that international cable carriers, who do not hold an ILD licence in India, should be licenced to provide international bandwidth to Indian ILD operators without any revenue share or entry fee, except for a nominal annual charge levied by the goverment.

Following the discussions, the DoT has also asked the industry to submit their proposals for plurilateral requests, ahead of the February-end deadline.